No Schedule C Deductions Before Business Commences

Start-ups may take months or even years before they begin to function as a going concern (“active trade or business”). Until they do, no deductions can be taken for expenses. This point was brought home by the Tax Court in a case where a taxpayer was working on matters needed to begin renting space to farmers as planned. But, for the year in issue, he hadn’t reached that point, so no deductions were allowed. #IdeaoftheDay

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